Power from the people to the people: Local communities can benefit from generating their own electricity

From solar, wind and hydro power – to one potential fracking project, Tom Bawden reports on schemes that earn their keep

The turbine sails of the Scout Moor Wind Farm in the Pennines dominate the skyline

From the protests against proposed fracking sites in the West Sussex village of Balcombe to widespread opposition to wind farms, communities are split by proposed energy generation projects.

In a bid to win support for fracking, the Government has offered generous cash incentives to communities based near possible hydraulic fracturing, or fracking, sites and is working to engage communities early on in the process.

This comes on top of the subsidies already available to local communities for generating their own renewable electricity.

From solar panels on school roofs to wind turbines on farms and hydropower plants on weirs, local communities around Britain are increasingly generating energy from renewable sources.

About 5,000 community energy groups have been set up and the Government and environmental campaign groups are pushing renewable energy projects hard to reduce carbon emissions, increase energy security and to bring down prices. With generous subsidies available for selling excess energy into the grid, some groups are coining it in – to the benefit of themselves and those around them.

Anna Watson, a Friends of the Earth energy campaigner, said: "Community energy projects offer local people the chance to power their homes and businesses with clean British energy – helping to tackle climate change. Community energy offers a long-lasting solution to price hikes from Britain's Big Six [energy suppliers], and pumps money back into local areas."

The Independent on Sunday looked at three projects already generating energy – in solar, wind and hydro power – along with one potential fracking project.

Stockport Hydro

Meet Thunder and Lightning, two Archimedes screw turbines that have generated hydro power at the Otterspool Weir on the river Goyt near Manchester since October 2012.

Set up with £250,000 of capital raised from 275 shareholders – most from, or with a connection to, the area – as well as a £200,000 loan and a £50,000 grant, the five-metre, 7.7-ton screws generate enough electricity to power 70 homes.

The electricity generated is fed into the national grid in return for a guaranteed price under the Government's "feed-in-tariff" subsidy scheme. Most of the proceeds are used to pay off the debt, but investors will get a dividend of up to 5 per cent a year – equating to £50 for a £1,000 stake – better than a bank or building society return.

It hopes to be profitable by 2016, when some of the proceeds will be channelled into local community projects. "We need to work out how that will work, but our investors are committed to it – we are a not-for-profit organisation serving the good of the community," said Louise Provan, a management consultant and a Hydro director.

Ms Provan says some group members are particularly obsessed. "The other day the screws stopped at 4am and six of the volunteers ran down to the river in their pyjamas and welly boots to fix the problem. The worst that could have happened is that we'd lose a bit of electricity, but people become very involved and attached – it's their baby."

Saltaire Primary School, Bradford

Under its headteacher, Sally Stoker, and business manager, Fiona Cressey, Saltaire Primary School in Bradford has installed 66 solar panels, covering 112 square metres of its roof. The school took out a £25,000 loan from Bradford Metropolitan District Council to cover the installation costs and expects to have paid back the entire loan in about eight years from savings on its energy bill and the money it makes from selling excess electricity to the grid. The school uses about half the electricity it generates and feeds the rest into the grid. Once the debt is repaid, the proceeds will be ploughed back into the school. She said the children are also energised by the solar panels. "They have caused great excitement. They love the fact that we have these solar panels and that they have been in the local news. They made the children much more environmentally conscious. Parents say they are hassling them about leaving things on standby," she said.

Larkin's Farm, Merseyside

Phil Knib, Larkin's community farm director, on the edge of a social housing development in Liverpool, borrowed £35,000 to build a 20ft wind turbine. Since it started turning in March 2011, it has generated 9,000kWh of electricity a year – enough power for two homes. The farm earns about £2,500 a year from the electricity it sells and has also significantly reduced its bills – like all forms of renewable energy it is intermittent, meaning sometimes more power will be generated than needed and at other times it will be less. He is now in the process of raising money to build a second one.

He admits to being a bit frightened of the blades from time to time. "It's scary when it's really windy. I look up and I think, 'Is this thing going to come off?' I know it should be OK, but it doesn't feel that way."

Roseacre, Little Plumpton and Great Plumpton, Lancashire

These two villages hit the headlines when Cuadrilla, Britain's biggest fracking company, revealed plans to produce shale gas in the vicinity. British Gas-backed Cuadrilla plans to drill up to eight wells in the area – entitling local communities to £100,000 of compensation per well. If all goes according to plan, this could become the first fracking site to produce gas since the Government first announced the payments last year to boost support for the controversial technique.

Exactly how the money will be allocated is still to be decided. For example, Cuadrilla has identified 130 households as being local, implying an average of about £6,000 per home when all eight wells are drilled.

However, the chances are it will end up being spread between a larger number of households. The task of managing and allocating the money has fallen to the Community Foundation for Lancashire, a charity representing local communities.

Cathy Elliott, the foundation's chief executive, knows she is working on a blueprint for Britain's fledgling fracking industry. "We will work with the community to define what exactly is included in the community and how it will be affected. And we will ask people what matters to them," she said. "The money might go to the church, a mums' and toddlers' group, a charity or a local enterprise," she added.